Executive also reveals the industry topics he hopes will be at the forefront of the election campaign
As the mortgage industry gears up for the remainder of what’s already been a frenetic year, referral sources can provide an invaluable asset to brokers in determining the future trajectory of the market and what they need to be prepared for in the coming months.
That’s the view of Dominion Lending Centres (DLC) president Eddy Cocciollo (pictured), who told Canadian Mortgage Professional that keeping in regular contact with those sources can provide brokers with an early indication of how – or whether – they need to adjust their approach in the near future.
“As in any shifting market, what you want to do is be sure that you pick up the phone and you’re calling your closest referral sources,” he said.
“They’re going to tell you if purchases are fewer and listings are fewer, so you’ll be ahead of any report by just picking up the phone and calling your best and biggest referral sources – be they realtors, financial planners, lawyers or investment people.”
It’s a practice he said brokers should already be adopting, one that should set them in good stead for the rest of the year and allow them to make any changes necessary.
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“You want to start doing that now, and understand where the market’s going,” he said. “Do you have to make more calls? Then start making more calls. Do you have to hire more people? Do you have to double down on your marketing?”
Staying apprised of market trends is particularly important for brokers, Cocciollo said, given the value that they can bring to their clients through advice and guidance – especially with the fixed vs. variable rate debate potentially set to rear its head in the coming months as a possible Bank of Canada rate increase looms.
The expertise and experience brokers can offer clients on that question could give them a valuable edge over competitors, particularly given the complex and often uncertain rate environment that mortgage applicants are required to navigate.
“I think when you look at what’s being offered on the variable side, there are sub-1.8% mortgages, and fixed are over 2%; you’d have to have a half- to three-quarter-per cent rise just [for variable] to catch up to fixed,” he said. “Those brokers that understand that can get across to their clients that this is still a really good deal because as rates rise, there are lots of savings there.
“If you don’t want that risk, and can’t tolerate a rising rate environment, of course fixed is still very attractive. I think the smart brokers are giving the in-depth sort of analysis of what rates are, where they’re going, and letting the clients decide – and a lot of clients are still OK with that variable rate.”
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A federal election is coming down the tracks, with Prime Minister Justin Trudeau having announced, after an official meeting with the governor general, that Canadians will go to the polls on September 20.
Cocciollo said that he would like to see ongoing questions around housing inventory and the continuing struggles of first-time homebuyers feature as discussion points during the campaign, with little progress witnessed on either issue in recent times.
“First-time homebuyers are struggling right now – we’re seeing a lot of help from the bank of Mom and Dad to get into the market,” he said. “Unless inventories are fixed, unfortunately that’s going to have to continue. If government’s not going to step in and try to [get] these developers to open up and build more housing in general, then we’re going to be stuck in this vortex for quite a bit.
“I know that some policies put forward by these different political parties are addressing [those issues], but we need to address them more… Housing is so important, not only to our economy but to the people of Canada, so hopefully they do push for a clearer and more concise policy.”
